FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE 99 BPE:: (Q-10) Suppose, you want to purchase EURO 65,000 to make payment on behalf of your importer. Please calculate the buying and selling exchange rate using the following Forex market data and also calculate the amount of BDT you have to pay for purchasing EURO 65,000? [20 Marks] Inter bank Forex rate: EUR 1 = USD 1.0978 – 1.1158 USD 1 = BDT 117.5854 – 118.6476 Answer: In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Sale agreement, so Higher rate will be realized. Calculation of Exchange Rate: πΈππ πΈππ πππ· (π΅π·π)Bid= (πππ· )Bid× (π΅π·π)Bid = 1.0978×117.5854 = 129.0853 πΈππ πΈππ πππ· (π΅π·π)Ask= (πππ· )Ask× (π΅π·π)Ask = 1.1158×118.6476 = 132.3870 πΈππ ∴π΅π·π= 129.0853 – 132.3870 Or, EUR1= BDT 129.0853 – 132.3870 Spot Selling price Per EURO in BDT 132.3870 So, Importer Will Pay for 65,000 Euro=BDT( 65,000×132.3870)= BDT 86,05,155.00 (Aprx.) 98 BPE:: (Q-10) Your exporter wants to sell a 120 day usance bill of EURO 85,000 to your bank. Calculate the buying exchange rate using the following information. Also calculate the amount of BDT to be paid by your bank. [4x5=20] (a) Inter-bank exchange rate: USD 1 = EUR 0.9266-0.9455 USD 1 = BDT 109.6508-110.7510 (b) Transit period 15 days. (c) Profit margin 0.10 per EURO. (d) Your banks overhead charge 0.0650%. (e) Interest rate 7% per annum. [Assume 360 days in a year. Please show your calculation.] Answer: Given Exchange Rate : USD1= EURO 0.9266 – 09455 USD1= BDT 109.6508 – 110.7510 Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Purchase agreement, so Lower rate will be realized. πΈππ πΈππ πππ· (π΅π·π)Bid= (πππ· )Bid× (π΅π·π)Bid = 1 ( πΈππ 1 **Bid Price ΰ¦ΰ¦²ΰ§ΰ¦ΰ§ ΰ¦ΰ§ΰ¦²ΰ§ΰ¦ΰ§ Ask Price হলΰ§ΰ¦ΰ§ ΰ¦―ΰ¦Ύΰ§ΰ₯€ 1 **Ask Price ΰ¦ΰ¦²ΰ§ΰ¦ΰ§ ΰ¦ΰ§ΰ¦²ΰ§ΰ¦ΰ§ Bid Price হলΰ§ΰ¦ΰ§ ΰ¦―ΰ¦Ύΰ§ΰ₯€ ×109.6508= 0.9455×109.6508= 115.9712 πππ· )Ask πΈππ π½ππ πππ· (π΅π·π)Ask= (πππ·)Ask× (π΅π·π)Ask = 1 ( πππ· )π΅ππ πΈππ ×110.7510= 0.9266×110.7510= 119.5241 πΈππ ∴π΅π·π= 115.9712 – 119.5241 Or, EUR= BDT 115.9712 – 119.5241 So, Spot buying price BDT 115.9712 per EURO. Calculation of Exchange Margin: Total Time of Bill Reciept = 120+15= 135 Days 135 Interest Per Euro= 115.9712×7%×360= Tk. 3.0442 Overhead Charge= 115.9712×0.0650%= 0.0754 Profit Margin = Tk. 0.10 per Euro ∴Total Exchange Margin= (3.0442+0.0754+0.10)= Tk. 3.2196 So, Buying Exchange Rate= (115.9712 - 3.2196)= Tk. 112.7516 (Per Euro) Therefore Customer account Will be credited= 112.7516×85000= Tk. 95,83,886 (Aprx.) 97 BPE:: (Q-10.a) Your importer wants to book for a payment of 90-day LC amount of EUR 25,000.00 to your bank. Calculate the exchange rate to deal with the import payment. How much does the importer have to pay to your bank? Please use the following information: [14 Marks] (i) Inter-bank exchange rate: USD 1 = BDT 109.5000-110.5000 EUR 1 = USD 1.0750-1.0770 (ii) Your bank's overhand charge 0.0831% (iii) Interest (or swap) cost 3.0% per annum (iv) Assume 360 days in a year Solution: Given Exchange Rate USD 1 = BDT 109.5000-110.5000 EUR 1 = USD 1.0750-1.0770 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Sale agreement, so Higher rate will be realized. πΈππ πΈππ πππ· (π΅π·π)Bid= (πππ· )Bid× (π΅π·π)Bid = 109.5000×1.0750 = 117.7125 Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE πΈππ πΈππ πππ· (π΅π·π)Ask= (πππ· )Ask× (π΅π·π)Ask = 110.5000×1.0770 = 119.0085 πΈππ ∴π΅π·π= 117.7125 – 119.0085 Spot Selling Exchange Rate per EURO is BDT 119.0085. Selling Exchange Rate= Exchange Rate per EURO + Exchange Margin Overhead Charge= Selling Price × Overhead Charge= 119.0085 × 0.0831%= 0.0989 90 Interest on Bill (Per Euro)= 119.0085×360 ×3%= BDT 0.8926 ∴ Exchange Margin= 0.0989 + 0.8926 = 0.9915 Selling Exchange Rate= 119.0085+0.9915 = 120.0000 BDT Therefore, customer account will be debited= 120.000×25000= BDT 3000000.00 (Aprx.) 97 BPE:: (Q-10.b) Calculate the buying and selling rate of Japanese Yen in BDT when inter-bank market exchange rates are, [6 Marks] USD 1 = BDT 109.5000-110.5000 USD 1 = JPY 145.3947- 146.0000 Solution: π½ππ π½ππ πππ· (π΅π·π)Bid= (πππ·)Bid× (π΅π·π)Bid = π½ππ 1 ( 1 ×109.5000= 146.000×109.5000= 0.7500 πππ· )Ask π½ππ π½ππ πππ· (π΅π·π)Ask= (πππ·)Ask× (π΅π·π)Ask = 1 πππ· ( )π΅ππ π½ππ 1 ×110.5000= 145.3947×110.5000= 0.7600 π½ππ ∴π΅π·π= 0.7500 – 0.7600 Or, JPY1= BDT 0.7500 – 0.7600 (Ans.) 96 BPE:: (Q-09) Your exporter wants to sell a 120-day usance bill of EUR 65,000.00 to your bank. Calculate the buying exchange rate of your bank. How much does your bank have to pay to the exporter? Please use the following information: (a) Inter-bank exchange rate: EUR 1 = USD 1.0715-1.0820 USD1= BDT 106.1010-107.7590 (b) Transit period 10 days (c) Profit margin BDT 0.10 per EUR (d) Your bank's overhead charge 0.0625% (e) Interest rate 6% per annum (Assume 360 days in a year. Please show your rough calculation) Shamal Datta, PO (SBPLC) [20 Marks] FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE Answer: Part-I: Given Exchange rate, EUR 1 = USD 1.0715-1.0820 USD1= BDT 106.1010-107.7590 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Purchase agreement, so Lower rate will be realized. πΈππ πΈππ πππ· (π΅π·π)Bid= (πππ· )Bid× (π΅π·π)Bid = 1.0715×106.1010= 113.6872 πΈππ πΈππ πππ· (π΅π·π)Ask= (πππ· )Ask× (π΅π·π)Ask = 1.0820×107.7590= 116.5952 πΈππ ∴π΅π·π= 113.6872 – 116.5952 Or, EUR1= BDT 113.6872 – 116.5952 Spot purchase rate of per EURO in BDT 113.6872. Calculation of Exchange Margin: Total Time of Bill Receipt= Bill Maturity Period + Transit Period=(120+10)= 130 Days Overhead Charge= BDT 113.6872×0.0625%= BDT 0.0711 130 Interest per Euro= BDT 113.6872 × 6% × 360= BDT 2.4632 Profit Margin = BDT 0.10 Per EURO Total Exchange Margin= BDT (Overhead Charge+Interest Rate+Profit) = BDT (0.0711+2.4632+0.10)= BDT 2.6343 So, Buying Exchange Rate= BDT (Spot Buying Rate-Total Margin) =BDT (113.6782-2.6343)= BDT 111.0529 Part-II: So, the bank has to pay exporter = BDT (111.0529×65000)= BDT 72,18,438.50 (Ans.) 96 BPE:: Based on the following information, please calculate the buying and selling rate of Bangladesh Taka per Japanese Yen when inter-bank market exchange rate was : [20 Marks] USD1=JPY 130.3010-132.1280 USD1=BDT 106.1010-107.7590 Also calculate the amount of BDT to be paid by your bank for buying 2.00 million Japanese Yen. [N.B. Please show your rough calculation] Solution: π½ππ π½ππ πππ· (π΅π·π)Bid= (πππ·)Bid× (π΅π·π)Bid = 1 ( Shamal Datta, PO (SBPLC) 1 ×109.5000= 132.1280×106.1010= 0.8030 πππ· )Ask π½ππ FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE π½ππ π½ππ πππ· (π΅π·π)Ask= (πππ·)Ask× (π΅π·π)Ask = 1 πππ· ( )π΅ππ π½ππ 1 ×110.5000= 130.3010×107.7590= 0.8270 π½ππ ∴π΅π·π= 0.8030 – 0.8270 Or, JPY1= 0.8030 – 0.8270 So, Buying price of 1 JPY= 0.8030 BDT 2 Million JPY= 2000000×0.8030= 16,06,000 BDT (ANS.) BPE-95:: (Q-09) Please calculate the exchange rate for buying a 120 days usance bill denominated in Pound Starling 75,000 on the basis of following data: [Marks-20] (a) Pound Starling1=US $ 1.4915 – 1.4990 (b) US $1= Tk. 90.1020 – 91.1020 (c)Transit Period 15 days 1 (d) Postage 34 % (e) Rate of interest 5% (f) Margin of profit Tk. 0.10 per Pound Sterling Please calculate the exchange rate as well as the amount to be credited to the customer’s account. [Assume 360 days a Year]. Solution: Given Exchange Rate: PS1=US $ 1.4915 – 1.4990 [PS refers to Pound Starling] US $1= Tk. 90.1020 – 91.1020 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Purchase agreement, so Lower rate will be realized. ππ ππ πππ· (π΅π·π)Bid= (πππ·)Bid× (π΅π·π)Bid = 1.4915×90.1020= 134.3871 ππ ππ πππ· (π΅π·π)Ask= (πππ·)Ask× (π΅π·π)Ask = 1.4990×91.1020= 136.5619 ππ ∴π΅π·π= 134.3871 – 136.5619 Or, PS1= BDT 134.3871 – 136.5619 So, Spot Buying Rate is 134.3871 BDT per Pound Starling. Calculation of Exchange Margin: Total Time of Bill Receipt= Bill Maturity Period + Transit Period=(120+15)= 135 Days 135 Interest per PS= BDT 134.3871× 5% × 360= BDT 2.5198 Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE 1 Postage Charge= BDT 134.3871×34%= BDT 0.0395 Profit Margin = BDT 0.10 Per Pound Starling Total Exchange Margin= Postage Charge + Interest Charged + Profit Margin = BDT (0.0395+2.5198+0.10)= BDT 2.6593 So, Buying Exchange Rate= BDT (Spot Buying Rate-Total Margin) =BDT (134.3871-2.6593)= BDT 131.7278 Part-II: So, the amount to be credited to the customer’s account for 75,000 Pound Starling= 131.7278×75,000= 97,79,585 BDT (Aprx.) BPE-95:: (Q-10) Using the following data please calculate the exchange rate for the retiring an import bill of Euro 35,000 and the amount to be debited from the customer’s account: [Marks-20] (a) Exchange rate in the interbank market Euro1= US $ 1.2050 – 1.2090 US $1= Tk. 91.1030 – 92.1030 (b) Profit Margin 1 16 % (c) Your Nostro Account abroad debited 15 days earlier in respect of this bill (d) Rate of interest 7% per annum. [Assume 360 days a Year]. Answer: Part-I: Given Exchange Rate: Euro1= US $ 1.2050 – 1.2090 US $1= Tk. 91.1030 – 92.1030 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Selling agreement, so higher rate will be realized. πΈππ πΈππ πππ· (π΅π·π)Bid= (πππ· )Bid× (π΅π·π)Bid = 1.2050×91.1030 = 109.7791 πΈππ πΈππ πππ· (π΅π·π)Ask= (πππ· )Ask× (π΅π·π)Ask = 1.2090×92.1030= 111.3525 πΈππ ∴π΅π·π= 109.7791 – 111.3525 Or, EUR1= BDT 109.7791 – 111.3525 So, Spot selling price per EURO is 111.3525 BDT Calculation of Exchange Margin: Time of Bill Receipt= 15 days 15 Interest per Euro= BDT 111.3525× 7% × 360= BDT 0.3248 Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE 1 Profit Margin = 111.3525×16%= BDT 0.0696 Total Exchange Margin= Interest per Euro + Profit= 0.3248+0.0696= BDT 0.3944 So, Selling Exchange Rate= BDT (Spot Selling Rate +Total Margin) =111.3525+0.3944= BDT 111.7469 Part-II: So, the amount to be debited from the customer’s account for 35,000 Euro= 35000×111.7469 = BDT 39,11,141.5000 (Aprx.) BPE-94:: (Q-09) Using the following data please calculate the exchange rate for the Euro and amount to be paid to the client for buying a draft of Euro 25,000 drawn on a German Bank: (a) Exchange rate in the interbank market Euro 1= $ 1.0732 – 1.1004 US $1= Tk. 85.3020 – 85.7525 (b) Usance period of the bill/draft 90 Days (c) Interest 6% p.a. (d) Profit margin Tk. 0.15 per Euro (e) Overhead charge 1 16 % (f) Transit period 10 days [Assume 360 days a Year] Answer: Part-I: Given Exchange Rate: Euro 1= $ 1.0732 – 1.1004 US $1= Tk. 85.3020 – 85.7525 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Selling agreement, so higher rate will be realized. πΈππ πΈππ πππ· (π΅π·π)Bid= (πππ· )Bid× (π΅π·π)Bid = 1.0732×85.3020 = 91.5461 πΈππ πΈππ πππ· (π΅π·π)Ask= (πππ· )Ask× (π΅π·π)Ask = 1.1004×85.7525 = 94.3621 πΈππ ∴π΅π·π= 91.5461– 94.3621 Or, EUR1= BDT 91.5461– 94.3621 So, Spot selling price per EURO is 94.3621 BDT Calculation of Exchange Margin: Time of Bill Receipt= (90+10) = 100 days Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE 100 Interest per Euro= BDT 94.3621 × 6% × 360= BDT 1.5727 Profit Margin = BDT 0.15 1 Overhead Charge= 94.3621×16%= BDT 0.0590 Total Exchange Margin = Interest per Euro + Profit Margin+ Overhead Charge = 1.5727+0.15+0.0590 = BDT 1.7817 So, Selling Exchange Rate= BDT (Spot Selling Rate +Total Margin) =94.3621+1.7817= BDT 96.1438 Part-II: So, the amount to be debited from the customer’s account for 25,000 Euro= 25000×96.1438 = BDT 24,03,595 (Aprx.) BPE-94:: (Q-10) Please calculate the exchange rate of your bank for purchasing an export bill for £15,000 using the following data and also calculate the amount payable to the exporter: (a) Tenor of the bill : 60 days sight (b) Rate of interest : 15% (c) Transit Period : 10 days (d) Overhead charges : Tk. 0.05 per £ (e) Bank’s profit margin : Tk. 0.10 per £ (f) Prevailing Exchange Rate: £1 = US $ 1.3820 – 1.3860 US $1= Tk. 84.7520 – 84.9500 [Assume 360 days a Year] Given Exchange Rate: PS1=US $ 1.3820 – 1.3860 [PS refers to Pound Starling] US $1= Tk. 84.7520 – 84.9500 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Purchase agreement, so Lower rate will be realized. ππ ππ πππ· (π΅π·π)Bid= (πππ·)Bid× (π΅π·π)Bid = 1.3820×84.7520= 117.1273 ππ ππ πππ· (π΅π·π)Ask= (πππ·)Ask× (π΅π·π)Ask = 1.3860×81.9500 = 117.7407 ππ ∴π΅π·π= 117.1273 – 117.7407 Or, PS1= BDT 117.1273 – 117.7407 So, Spot Buying Rate is 117.1273 BDT per Pound Starling. Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE Calculation of Exchange Margin: Total Time of Bill Receipt= Bill Maturity Period + Transit Period=(60+10)= 70 Days 70 Interest per PS= BDT 117.1273× 15% × 360= BDT 3.4162 Overhead Charge= Tk. 0.05 per £ Profit Margin = Tk. 0.10 per £ Total Exchange Margin= Overhead + Interest Charged + Profit Margin = BDT (0.05+3.4162+0.10)= BDT 3.5662 So, Buying Exchange Rate= BDT (Spot Buying Rate-Total Margin) =BDT (117.1273- 3.5662)= BDT 113.5611 Part-II: So, the amount to be credited to the customer’s account for 15,000 Pound Starling= 113.5611×15,000= 17,03,416.5000 BDT (Aprx.) DAIBB-93:: (Q-09) A customer of your bank requests you to remit 12,000 Pound Sterling in London through T.T. using the following data. Please calculate your selling rate of pound Sterling and the amount to be debited to the customer’s account for this remittance. (a) G.B. £1 = US $ 1.4203 – 1.4208 US $ 1 = Tk. 84.8200 – 85.0520 (b) Profit margin Tk. 1 16 (c) SWIFT charge Tk. Year] % per Pound Sterling 1 32 % [Assume 360 days a Answer: Part-I: Given Exchange Rate: G.B. £1 = US $ 1.4203 – 1.4208 US $ 1 = Tk. 84.8200 – 85.0520 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Selling agreement, so higher rate will be realized. πΊπ΅π πΊπ΅π πππ· (π΅π·π)Bid= (πππ·)Bid× (π΅π·π)Bid = 1.4203×84.8200 = 120.4698 πΊπ΅π πΊπ΅π πππ· (π΅π·π)Ask= (πππ·)Ask× (π΅π·π)Ask = 1.4208×85.0520 = 120.8419 πΊπ΅π ∴π΅π·π= 120.4698– 120.8419 Or, GBP 1= BDT 120.4698– 120.8419 So, Spot selling price per EURO is 120.8419BDT Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE Calculation of Exchange Margin: 1 Profit Margin = 120.8419×. 16%= 0.0755 1 SWIFT Charge= 120.8419×32%= BDT 0.0377 Total Exchange Margin = Profit Margin+ SWIFT Charge = 0.0755+0.0377= BDT 0.1132 So, Selling Exchange Rate= BDT (Spot Selling Rate +Total Margin) =120.8419+0.1132= BDT 120.9551 Part-II: So, the amount to be debited from the customer’s account for 25,000 Pound = 12000×120.9551 = BDT 1451461.2000 (Aprx.) DAIBB-93:: (Q-10) Based on the following data, please calculate the exchange rate for the Euro 50,000 against an export bill with a usance period of 120 days and the amount to be credited to the customer’s account: (a) Exchange rate in the interbank market US $1= Tk. 84.7520 – 84.9500 Euro 1=US $ 1.1830 – 1.1845 (b) Profit margin Tk. 0.20 per Euro (c) Transit period 5 days (d) Overhead charge 1 32 % (e) Interest 5% p.a. [Assume 360 days a Year] Given Exchange Rate: US $1= Tk. 84.7520 – 84.9500 Euro 1=US $ 1.1830 – 1.1845 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Purchase agreement, so Lower rate will be realized. πΈππ πΈππ πππ· (π΅π·π)Bid= (πππ· )Bid× (π΅π·π)Bid = 1.1830×84.7520 = 100.2616 πΈππ πΈππ πππ· (π΅π·π)Ask= (πππ· )Ask× (π΅π·π)Ask = 1.1845×84.9500 = 100.6232 πΈππ ∴π΅π·π= 100.2616 – 100.6232 Or, EUR1= BDT 100.2616 – 100.6232 So, Spot Buying Rate is 100.2616 BDT per EURO. Calculation of Exchange Margin: Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE Total Time of Bill Receipt= Bill Maturity Period + Transit Period=(120+5)= 125 Days 125 Interest per EURO= BDT 100.2616 × 5% × 360= BDT 1.7407 1 Overhead Charge per EURO =BDT 100.2616× 32% = BDT. 0.0313 Profit Margin per EURO = Tk. 0.20 Total Exchange Margin= Interest Charged + Overhead + Profit Margin = BDT (1.7407+0.0313+0.20)= BDT 1.9720 So, Buying Exchange Rate= BDT (Spot Buying Rate-Total Margin) =BDT (100.2616 - 1.9720)= BDT 98.2896 Part-II: So, the amount to be credited to the customer’s account for 50,000 EURO= 98.2896×50,000= 49,14,480 BDT (Aprx.) DAIBB-92: (Q-09) Based on the following data, please calculate the exchange rate for the Pound Sterling for buying 120-day export bills and the amount payable to them: (a) Exchange rate in the interbank market £ 1= US $ 1.3805 – 1.3840 US $ 1 =Tk. 84.1000 – 84.7000 (b) Profit margin Tk. 0.10 per Pound (c) Transit period 10 days (d) Interest 10% p.a. [Assume 360 days a Year] Given Exchange Rate: £ 1= US $ 1.3805 – 1.3840 [PS refers to Pound Starling] US $ 1 =Tk. 84.1000 – 84.7000 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Purchase agreement, so Lower rate will be realized. ππ ππ πππ· (π΅π·π)Bid= (πππ·)Bid× (π΅π·π)Bid = 1.3808×84.1000 = 116.1001 ππ ππ πππ· (π΅π·π)Ask= (πππ·)Ask× (π΅π·π)Ask = 1.3840×84.7000 = 117.2248 ππ ∴π΅π·π= 116.1001– 117.2248 Or, PS1= BDT 116.1001– 117.2248 So, Spot Buying Rate is 116.1001 BDT per Pound Starling. Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE Calculation of Exchange Margin: Total Time of Bill Receipt= Bill Maturity Period + Transit Period=(120+10)= 130 Days 130 Interest Per PS= BDT 116.1001× 10% × 360= BDT 4.1925 Profit margin Tk. 0.10 per Pound Total Exchange Margin= Interest Charged + Profit Margin = BDT (4.1925+0.10)= BDT 4.2925 So, Buying Exchange Rate= BDT (Spot Buying Rate-Total Margin) =BDT (116.1001- 3. 4.2925)= BDT 111.8076 (Ans.) DAIBB-92: (Q-10) Please work out your selling rate for retirement of import documents for Euro 20,000 and the amount to be debited to the customer’s account. The relevant data are as follows: (a) Exchange rate in the interbank market EUR 1 = US $ 1.1820 – 1.1830 US $ 1 = Tk. 84.7050 – 84.7090 (b) Profit margin 1 10 % (c) Out of pocket expenses 1 20 % (d) Rate of Interest 12% p.a. [Assume 360 days a Year] Given Exchange Rate: EUR 1 = US $ 1.1820 – 1.1830 US $ 1 = Tk. 84.7050 – 84.7090 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Selling agreement, so higher rate will be realized. πΈππ πΈππ πππ· (π΅π·π)Bid= (πππ· )Bid× (π΅π·π)Bid ΰ¦ΰ§ΰ§ΰ¦¬ΰ¦Άΰ¦€: ΰ¦ͺΰ§ΰ¦°ΰ¦²ΰ§ΰ¦ΰ§ বববΰ§ΰ¦Ώΰ¦ ΰ¦ΰ§ΰ¦²ΰ§ΰ¦ΰ§ΰ¦° ΰ¦ΰ¦₯ΰ¦Ύ ΰ¦ΰ¦²ΰ§ΰ¦ΰ§ΰ¦ ΰ¦ΰ§ΰ¦ΰ₯€ ১৫ বিৠধলΰ§ΰ¦ΰ¦° ΰ¦ ΰ¦Ώΰ¦ΰ¦ ΰ¦ΰ¦°ΰ¦Ύ হলΰ§ΰ¦ΰ§ΰ¦²ΰ§ΰ¦ΰ§ΰ₯€ = 1.1820×84.7050 = 100.1213 πΈππ πΈππ πππ· (π΅π·π)Ask= (πππ· )Ask× (π΅π·π)Ask = 1.1830×84.7090 = 100.2107 πΈππ ∴π΅π·π= 100.1213– 100.2107 Or, EUR1= BDT 100.1213– 100.2107 So, Spot selling price per EURO is 100.2107 BDT Calculation of Exchange Margin: Time of Bill Receipt= 15 days 15 Interest per Euro= BDT 100.2107 × 12% × 360= BDT 0.5011 1 Profit Margin = BDT 100.2107× 10% =0.1002 Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE 1 Pocket Charge= 100.2107 ×20%= BDT 0.0501 Total Exchange Margin = Interest per Euro + Profit Margin+ Pocket Charge = 0.5011+0.1002+0.0501 = BDT 0.6514 So, Selling Exchange Rate= BDT (Spot Selling Rate +Total Margin) =100.2107 +0.6514= BDT 100.8621 Part-II: So, the amount to be debited from the customer’s account for 20,000 Euro= 20000×100.8621 = BDT 20,17,242 (Aprx.) DAIBB-91:: (Q-09) Please calculate the exchange rate of pound Sterling in terms of Bangladesh Taka for buying a usance bill using the following data: (a) US $ 1 =Tk. 83.7560 – 83.7600 £ 1= US $ 1.2747 – 1.2757 (b)Transit time 15 days (c) Rate of interest 10% p.a. (d) Margin of profit Tk. 0.10 per pound sterling (e) Usance period of the bill 120 days Please calculate the amount to be paid to the exporter. 360 days a Year] [Assume Given Exchange Rate: US $ 1 =Tk. 83.7560 – 83.7600 [PS refers to Pound Starling] £ 1= US $ 1.2747 – 1.2757 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Purchase agreement, so Lower rate will be realized. ππ ππ πππ· (π΅π·π)Bid= (πππ·)Bid× (π΅π·π)Bid = 1.2747×83.7560 = 106.7638 ππ ππ πππ· (π΅π·π)Ask= (πππ·)Ask× (π΅π·π)Ask = 1.2757×73.7600 = 106.8526 ππ ∴π΅π·π= 106.7638– 106.8526 Or, PS1= BDT 106.7638– 106.8526 So, Spot Buying Rate is 106.7638 BDT per Pound Starling. Calculation of Exchange Margin: Total Time of Bill Receipt= Bill Maturity Period + Transit Period=(120+15)= 135 Days 135 Interest Per PS= BDT 106.7638× 10% × 360= BDT 4.0036 Profit margin Tk. 0.10 per Pound Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE Total Exchange Margin= Interest Charged + Profit Margin = BDT (4.0036+0.10)= BDT 4.1036 So, Buying Exchange Rate= BDT (Spot Buying Rate-Total Margin) =BDT (106.7638- 4.1036)= BDT 102.6602 Therefore, Customer account will be credited at the rate of BDT 102.6602 for each unit of Pound Starling. (Ans.) DAIBB-91:: (Q-10) Using the following data please calculate the exchange rate for retiring an import bill of your client in Pound: (a) Spot rate on the date of lodgment: £ 1= US $ 1.2205 – 1.3205 US $ 1 =Tk. 83.6010 – 84.6010 (b) Bill negotiated abroad 10 days earlier (c) Interest rate 14% p.a. 1 (d) Profit margin % 6 (e) The bill is denominated in Pound Starling (£) [Assume 360 days a Year] Given Exchange Rate: £ 1= US $ 1.2205 – 1.3205 [PS refers to Pound Starling] US $ 1 =Tk. 83.6010 – 84.6010 In case of USD-BDT exchange rate, domestic currency (BDT) is flexible and foreign currency (USD) is fixed. So, USD-BDT rate is direct Exchange Rate. The maxim of Direct Exchange Rate is “ Buy Low, Sell High”. This is Sale agreement, so Higher rate will be realized. ππ ππ πππ· (π΅π·π)Bid= (πππ·)Bid× (π΅π·π)Bid = 1.2205×83.60140 = 102.0350 ππ ππ πππ· (π΅π·π)Ask= (πππ·)Ask× (π΅π·π)Ask = 1.3205×84.6010 = 111.7156 ππ ∴π΅π·π= 102.0350– 111.7156 Or, PS1= BDT 102.0350– 111.7156 So, Spot Selling Rate is 111.7156BDT per Pound Starling. Calculation of Exchange Margin: Total Time of Bill Receipt= 10 Days 100 Interest per PS= BDT 111.7156× 14% × 360= BDT 0.4344 1 Profit Margin = 111.7156×6% = 0.1862 Total Exchange Margin= Interest Charged + Profit Margin = BDT (0.4344+0.1862)= BDT 0.6206 Shamal Datta, PO (SBPLC) FOREX MATH SOLUTION: 91 DAIBB TO 99 BPE So, Buying Exchange Rate= BDT (Spot Buying Rate-Total Margin) =BDT (111.7156- 0.6206)= BDT 112.3362 Therefore, Customer account will be debited at the rate of BDT 112.3362 for each unit of Pound Starling. (Ans.) Shamal Datta, PO (SBPLC)
0
advertisement
Related documents
Download
advertisement
Add this document to collection(s)
You can add this document to your study collection(s)
Sign in Available only to authorized usersAdd this document to saved
You can add this document to your saved list
Sign in Available only to authorized users